ETAPA DE OPERACIÓN

We have investigated the topic of corporate ownership and governance in detail because the internal coordination of employees is a key organizational challenge that any post-management paradigm must master before being able to replace management. We now turn to leadership because we see leader- ship as a means to coordinate people in a non-managerial way.

Chapter 5 | Let Talent Lead! Promoting Self-Organizing Teams 72

Leadership, like management, is another widely used concept that many peo- ple have talked and written about. In fact, management and leadership are often used interchangeably. Usually, the CEO and top management are consid- ered leaders by default because they have a lot of employees report to them. It is hard to find company websites and Human Resource departments that will apply the terms leader and leadership to normal employees not holding a management position.

A lot of literature exists on different leadership styles, such as authoritarian, dem- ocratic, and laissez-faire leadership styles. We also know that leadership can be task- or relationship-oriented, so leaders can either focus on the people they lead or on the tasks that need to be executed with the help of these people. In the past, many leadership theories focused on personality traits of great leaders, such as intelligence, the ability to listen and learn, to adjust to changed circumstances, and so on, claiming that individuals possessing such personality traits will emerge as leaders in a variety of different situations at work, at home, and in public. In 2003, James MacGregor Burns introduced transformational leadership to distinguish his leadership vision from transactional or managerial leadership in which rewards and punishments are used to ensure compliance of the group members with the leader’s ideas. Transformational leadership aims at inspiring group members and enabling them to become problem-solvers themselves, instead of them only following the leader’s commands. Since such collabora- tion will not only transform the group members’ personality, but also affect and change the leader him-/herself, transformational leadership is truly a holis- tic concept: it presents leadership as the result of an interaction between people, and not as a static set of personal characteristics.

Going forward, we rely on a situational theory of leadership. Situational theories emphasize the importance of specific contexts to understand leadership. The nature of tasks to be executed (e.g., technical or social), the culture of an orga- nization, and the maturity level of the group members2 _{are examples of such}

contextual factors. These contexts determine which leadership style is most suited in a particular situation and which concrete individuals emerge as leaders.

■Leadership We define leadership as an organizational paradigm that enables talent-driven self-alignment of work along the value chain.

Notice that this definition emphasizes processes and de-emphasizes struc- tures. The situational back and forth between people is more important for enabling leadership than positions and hierarchies (see Figure 5-1).

2_See “_{Hersey-Blanchard Situational Leadership Theory” in http://en.wikipedia.org/} wiki/Situational_leadership_theory

Leading When You’re Not the Boss 73

Figure 5-1. Leadership Paradigm

Leaders have a vision, take the initiative, and convince others to support them, and they may be supporters of other leaders in other contexts. Supporters plan and execute the work necessary to achieve the leader’s vision and they, in turn, can also be leaders in other contexts.

The self-alignment of work is achieved through talented employees who emerge as situational leaders. Talent comes from Latin talentum and meant at first a measurement of weight and then of gold, before it became to mean simply a sum of money. Etymologically, talent is money! Today, talent usually means a natural disposition enabling a person to perform particularly well in a certain area.

The term talent management was first used 1997 in a business study by stra- tegic management consultants at McKinsey & Company, and then in a book publication shortly thereafter, entitled The War for Talent.3 _{In the book, the}

authors distinguish three kinds of employees. The so-called A-players are high performers who must be identified early and promoted through challenging top talent and high-potential programs. B-players are mediocre performers who should be supported and developed through training and learning pro- grams. Finally, C-players are bad performers who should be set free as quickly as possible.

The simplicity of this talent management approach is enticing—what could make more sense than investing in good employees, and getting rid of bad ones? Yet, in a post-management, and, in fact, in any kind of systemic perspec- tive, such universal labeling of employees as good, bad, and mediocre is reduc- tionist and misses the mark. Combining eleven A-players does not necessarily form the perfect football or soccer team, but more likely results in competi- tion, conflict, and a war between talents.

Chapter 5 | Let Talent Lead! Promoting Self-Organizing Teams 74

Similarly, organizations do not function in a linear, arithmetical way. The defi- nition of what skills and characteristics constitute an A-, B-, and C-player is subjective and varies over time, reflecting changed business requirements and new objectives. More importantly, the exclusive focus on individual per- formance completely overlooks that organizations depend on the practical interaction between individuals. Diversity, complementary skills, and success- ful collaboration across physical and departmental borders are more likely to result in organizational effectiveness and innovation than theoretical models of individual excellence.

Again, we must remember the fundamental insight of systemic thinking: the whole is more than the sum of its parts. Employees who, based on a snapshot of abstractly defined abilities, are judged C-players, may in fact possess hidden skills and exhibit extraordinary and even leadership behavior when grouped with others and working in a particular setting. The proposal to strive solely for A-players and to fire C-players is itself the opposite of leadership—it’s a leader’s declaration of bankruptcy. Leaders actually understanding their busi- ness will see potential in most employees, including seeming under-performers, and put it to good use, instead of following the herd and paying exorbitant salaries to a selected few.

It is difficult for employees to find the place in a corporation where their tal- ent becomes visible and is acknowledged. Corporate organizational charts are complex, especially for large groups with fully or partially owned sub- sidiaries. A holding may exist for managing the group’s finances; global units may provide central human resource and information technology services to country organizations around the globe; and product divisions may be run as separate legal entities or as profit centers, producing their own profit and loss statements.

Human resource departments primarily look at the organization through the lens of hierarchical job levels. Nomenclature may differ from country to coun- try, and from organization to organization, but most corporations define job families for each line of business, such as research & development, production, marketing, sales, and service. For each job family, there usually exist four or five job levels. For example, marketing specialist may be the entry position in mar- keting for a new employee fresh from college, while marketing associate and senior marketing associate may depict positions for more experienced person- nel. Starting on job level three or four, career tracks are usually split, allowing individuals to choose either a line management track (marketing manager and senior marketing manager), a project management track (project manager or senior project manager), or an expert career track (expert or chief expert). While these five job levels are associated with a standard employment con- tract that leaves little room for negotiations, the higher ranking executive job roles represent non-standard jobs with customized contracts. Board mem- bers normally only sign up for a three-year period, after which their contract has to be extended by the board of directors.

Leading When You’re Not the Boss 75

In order to support the sales process and to increase customer satisfaction, employees holding customer-facing jobs are often allowed and, in fact, encour- aged to put fancy job titles on their business cards which differ from their formal job level. For example, the job titles vice president or senior vice presi- dent suggest that the respective employee is directly involved in organizational decision-making on a high level, while his or her actual position in the HR system may only be that of manager or senior manager, so one of the five standard job levels.

This job title inflation reflects a fundamental problem within all hierarchical organizations: the problem of employee motivation. Managers use hierarchies and job titles to create competition among employees and increase their motivation to follow the manager’s demands. Yet while competition for the best idea is productive, competition simply for a higher status in the organiza- tion is counter-productive. Such formal competition is often not related to actual work issues and, therefore, is not in the company’s best interest.